Canadian Underwriter

Loss ratio deteriorates 6.1 points for Saskatchewan Auto Fund

July 20, 2017   by Canadian Underwriter

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Saskatchewan’s Auto Fund reported Thursday a loss ratio of 86.5% for the year ending March 31, 2017, up 6.1 points from 80.4% during the same period a year earlier, while the head of Saskatchewan Government Insurance suggested that with the federal bill proposing legalization of marijuana, there will be an increase in Saskatchewan in funding for drug recognition evaluators and field sobriety testing.

SGI reported Thursday that the Auto Fund, which SGI administers, had net premiums written of $924.95 million during the fiscal year ending March 31, 2017 compared to $920.5 million during the year ending March 31, 2016.

“The slight increase is due to customers moving to vehicles with higher premiums,” SGI said of the Auto Fund. “The number of vehicles insured years decreased 0.2% during the year to 933,738 from 935,723.”

In 2015, the province directed SGI to change its fiscal year end from Dec. 31, to March 31. In addition to the Auto Fund, SGI operates a for-profit property and casualty insurance carrier.

The Auto Fund is a compulsory vehicle insurance program that covers vehicle damage, property liability, injury coverage. Insureds have a choice of purchasing either no-fault or tort injury coverage.

The Auto Fund also provides vehicle registrations and driver licensing.

SGI reported the Auto Fund had net claims incurred of $798 million in the 2016-17 fiscal year, up $63 million from $735 million during the year ending March 31, 2016.

Current year claims were $835.9 million in the latest fiscal year but there was a prior year redundancy. Current year damage claims, excluding storm claims, were $527 million during the 2016-17 fiscal year, up $43 million, or 8.9%, from $484 million in 2015-16.

The Auto Fund’s premiums are subject to review by the Saskatchewan Rate Review Panel.

“Storm claim losses totaled $26.7 million in 2016-17, primarily due to a July hailstorm in Moose Jaw and surrounding area,” SGI CEO Andrew Cartmell wrote in the annual report.

Cartmell also alluded to two federal government bills before the House of Commons.

Bill C-45, the Cannabis Act, was referred June 8 to the House of Commons Standing Committee on Health. With that bill, Canada’s ruling Liberals propose to make it legal for people 18 years of age or older to possess up to 30 grams of dried legal cannabis or equivalent in non-dried form when in public.

A “companion” bill is C-46, which proposes several changes to the Criminal Code provisions on impaired driving, federal Attorney General Jody Wilson-Raybould  said June 13 before the House of Commons Standing Committee on Justice and Human Rights.

If Bill C-46 is passed into law, there will be a new Criminal Code offence of “low levels” of tetrahydrocannabinol (THC) in combination with low levels of alcohol, Wilson-Raybould told the Commons earlier.

Drivers caught with two and five nanograms of THC in their blood would face a maximum fine of $1,000 while drivers having five nanograms or more, or a mixture of THC and alcohol, would have “would have escalating penalties that mirror the existing impaired driving penalties,” Wilson-Raybould said earlier.

Bill C-46 would also give a police officer the authority to “demand that an individual provide a blood sample if the officer has reasonable grounds to believe that the individual has committed an offence of driving while impaired by a drug, or of driving with a prescribed BDC, whether or not the officer makes a demand for a Drug Recognition Evaluation (DRE),” the federal government states in a backgrounder. “This is a change from the current approach, in which a blood demand may only be made after a DRE,” which is normally conducted at a police station.

“As we look ahead to cannabis legalization in 2018, we are studying proposed federal impaired driving laws and preparing for the impact on traffic safety and impaired driving here in Saskatchewan,” Cartmell wrote in the Saskatchewan Auto Fund annual report released July 20.

“We are taking a proactive approach, funding increased training for drug recognition evaluators and standard field sobriety testing.”


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